StartupTalky

Tag: Customer Lifetime Value

  • What is Lead Retention? Top Peaks for Lead Retention in 2024

    A large-scale marketing initiative or eye-catching commercial might attract hundreds, if not millions, of potential clients. But if the company didn’t have any successful customer retention tactics in place to convert these individuals into devoted brand ambassadors, it would all be for nothing.

    Since the global market is starting a new chapter, your company must develop fresh strategies to forge a strong emotional bond with its present clientele. Our skilled experts have put together some retention strategies, which ought to be effective in any industry.

    What is Lead Retention?

    Top Peaks for Customer Retention in 2024

    What is Lead Retention?

    The ability to convert just a simple inquiry into a profitable relationship defines success across all kinds of industries. It includes retail and industries of eCommerce, wholesale, and a lot more.

    Lead retention is something that brings in constant revenue to your workplace. It’s the art and science of capturing, nurturing, and converting leads into promising and loyal customers, which brings in customer satisfaction.

    6 Easy Ways to Boost Customer Loyalty and Retain Customers StS

    What is a Retention Date?

    This figure evaluates how long your business can continue to serve the same clients. Utilize this equation: 

    💡
    Beginning customers × 100 / (Starting customers – New consumers)

    Imagine you had 100 customers at first, then after a year, you added 20 more and lost 15. The rate at which you would retain customers is: 

    85% equals (100-15) / 100 × 100.

    What is CCR?

    CCR (customer churn rate) is the percentage of customers who leave your brand within a predetermined time frame.

    The formula is:

    💡
    (Starting customers / Lost customers) × 100%

    For example, you may have 100 clients at first, but after a month, you lose 15 disgruntled ones. The churn rate is 15% (15 / 100)  × 100%. 

    Stronger client retention is indicated by reduced churn, thus lower is better.

    What is CLV?

    Using CLV (Customer lifetime value), businesses may calculate the overall revenue a single customer brings in throughout a long-term partnership.

    The equation is: 

    💡
    Purchase Frequency × Average Order Value × Length of Customer Life

    Wherein, the amount paid on each purchase is known as the average order value. The mean quantity of purchases made annually is known as purchase frequency.

    Client Lifespan: How long does a typical client stay with you?

    Try to understand this with this–a $50 order is typically placed by a customer who stays five years and makes purchases every three months. $500 is the CLV.

    Top 10 Customer Retention Tools to Help You Retain Customers
    It is crucial for any business to retain its customers for long. Popular customer retention tools include Amplitude, Zendesk, Qualaroo, and more.
    StartupTalkyMarlene Ann Anthony

    Top Peaks for Customer Retention in 2024

    The process of onboarding is your first-ever chance to stand out and make a good impression on your new customers. Setting them up for success with your service or product is also your chance. An onboarding process should be self-explanatory, concise, and easy to follow. It should also be personalized to the individual customer’s needs.

    Here are some tips for Client Retention-

    Welcome Email

    • Always start your journey by attracting clients with a welcome email. This email is the first step in building up a conversation with the client. It should include the introduction of your company and your product or service. It should also include a link to the onboarding documentation.
    • The instructions that you deliver should be clear and concise. 
    • The onboarding process of your company or product should be easy to understand and follow.
    • Avoid using synonyms to make it more unique. Clients like to read easy information that they can understand in the way they read.
    • Documentations should be well organized and easy to navigate.

    Personalized Onboarding Process

    • Every customer should have a customized onboarding experience from you. 
    • This involves referencing their brand, business, and sector at every turn.
    • Your clients should find it simple to receive assistance if they have questions. 
    • This means giving them an email address or a live chat window via which they can reach you.

    Discounts and Rewards

    • One popular strategy for encouraging customer retention is offering discounts and rewards. 
    • One may provide future purchase discounts, complimentary trials of new goods or services, or even just rewards as points that could be exchanged for prizes.

    Loyalty is Longevity

    • Rewarding your devoted clients with a loyalty program is excellent for long-term relationships. 
    • You can provide them with exclusive prices, first dibs on upcoming goods or services, or even just a feeling of belonging.

    Customize the Offers

    • Your chances of getting your clients interested in your offerings increase with their level of personalization. 
    • Using content effectively will interest your audience and keep them coming back for more. 
    • Articles, infographics, and blog posts work well to attain engagement and offer better value.

    Conclusion

    These clients or lead retention techniques have been identified as critical measures for business performance in 2023 and will continue to be so in 2024, even though certain modifications are necessary. 

    Customer contempt for chatbots or AI applications shouldn’t be taken as a sign to fully stop using them in the workflow. To meet client expectations regardless of their preferences or needs, you should instead support your trained agents using automated systems.

    FAQs

    What is lead retention?

    The ability to convert just a simple inquiry into a profitable relationship is called lead retention. Lead retention is something that brings in constant revenue to your workplace.

    What is the customer churn rate?

    CCR (customer churn rate) is the percentage of customers who leave your brand within a predetermined time frame.

    What are the top customer retention strategies to be followed in 2024?

    The top customer retention strategies to be followed in 2024 include sending welcome emails, a personalized onboarding process, offering discounts and rewards, rewarding devoted clients with loyalty programs, and customizing the offers.

  • What are Startup KPIs & How to Track Them

    The definition of a startup company states that it is a company or project undertaken by an entrepreneur to seek, develop and validate a scalable business model. Such newly formed companies, typically, do not have a fully developed business model and, more importantly, they lack adequate capital to grow and expand. They begin their business operations with high costs and limited revenue.

    There are many startups that turn to family, friends, and even venture capitalists for seed capital that can be used for market research as well as developing a business plan. As a business is taken off the ground by the entrepreneur, there are many important considerations like deciding on a location, the legal structure of the company, setting up the distribution channel for their product or service, etc. However, continually measuring the performance of the business to ensure that it remains valid, scalable, and relevant tops this list.

    What Are Startup KPIs?
    Need For Startup KPIs
    Important KPIs To Track

    What Are Startup KPIs?

    Key Performance Indicators, more commonly known as KPIs, are used extensively by businesses to measure their value and success. As true as these are for established businesses, startups fall into a different category in relation to KPIs.

    To drive growth that is meaningful and relevant to the target market, startup KPIs are used to identify, evaluate and develop a better strategy that helps to improve operational efficiency. Such KPIs, as related to startups, are the qualitative and quantitative measures that allow them to grow and sustain themselves.

    Need For Startup KPIs

    KPIs allow startups to better evaluate their business processes, and understand their efforts and the related results. It helps them to concentrate their focus and efforts better on processes that deliver better results through sound business decisions.

    • KPIs highlight the right path and direction for the business
    • Measuring KPIs allows the startup to identify gaps in the products or services and recognize areas that need improvement
    • KPIs are extremely helpful to showcase business results to prospective investors. It shows sincerity and focus as it can help the entrepreneur highlight the YoY business growth projections

    Lead Generation KPIs to Analyse Lead-generation Strategy
    Lead generation is the most crucial component of a digital marketing strategy. Here are the most important Lead generation KPIs to consider.
    StartupTalkyPreeti Karna

    Important KPIs To Track

    Having understood what are startup KPIs and why are they needed; it is equally important to have a clear understanding of exactly what KPIs need to be tracked for a startup.

    Addressable Market Size

    As the header suggests, this measures the company’s target audience and market size which, then, determines the number of consumers it might attract. What this does is give the startup an idea of its operating budget by determining the marketing needs. This KPI can be measured through conducting market research and communicating with their target audience through various forms of advertisement and social media.

    Profit Margin

    Undeniably, this is probably the most important KPI to track for a startup. This can be measured by calculating the difference between the cost of manufacturing and the final selling price. This gives an insight into the company’s return on investment and the probable time period in which the company might turn profitable. It also helps in evaluating the company’s long-term sustainability prospects and its growth.

    Calculating Monthly Burn

    Startups commonly have a negative cash flow in the beginning stages of their business operations due to either higher customer acquisition rates or smaller profits. The monthly burn statement helps them to understand their total debt and the money that they might lose every month in the beginning. Simplistically, monthly burn is calculated as the revenue generated minus the expenditure for inventory and overheads.

    Adora Cheung – How to Set KPIs and Goals

    Measuring the Runway

    This is a KPI that allows the company a clear understanding of the time they have before the cash runs out. Commonly, the runway time for startups is between 12 and 18 months to gain a steady number of customers and become profitable.

    Measuring Customer Acquisition Cost (CAC)

    Manufacturing cost, marketing cost, and distribution cost, all add up to a final number called the Customer Acquisition Cost (CAC). This is a cost that startups must be aware of and maintain strict vigilance on it. CAC is directly proportional to the growth time of a business.

    Customer Acquisition Cost by Industry | CAC Benchmarks
    Customer acquisition cost is the price you pay to convert a lead into a customer. Read to know CAC benchmarks by industries & marketing channels.
    StartupTalkyRishabh Rathi

    Measuring Customer Retention Rate (CRR)

    Customer retention is important for the survival of any business, especially startups. Measuring CRR gives a startup a clear idea of how its product is performing in the market. It also helps startups to estimate future sales on a monthly basis and take steps to improve and increase customer retention.

    Measuring Customer Lifetime Value (CLV)

    This particular business metric allows the business to understand the business a startup may receive from a customer over the course of the company’s lifespan. The higher the customer retention rate of a startup, the higher the customer lifetime value for the company. It helps the startup to determine its growth as well as identify potential sales forecasts.

    Measuring CAC Recovery Time

    After measuring the CAC, it is also important to measure what will be the time frame in which the startup will begin making a profit from their customer acquisition cost. Measuring the CAC recovery time also helps a startup in gaining insights into the possible net revenue that the company might generate, affecting the organization’s cash flow and financial growth.

    Conclusion

    Startups are businesses that aim for success through growth and expansion by building a business that is sustainable by driving revenue growth. Hence, their business strategies have to be focused on driving a product that answers a customer need and growing their customer base through customer acquisition and customer retention. Hence, every step taken in a startup business operation must be well thought out and measured so that the path to success becomes clearer and more focused. That can be achieved by measuring KPIs to ensure that the business is growing in the right direction and that the money invested will result in continued and sustained profits over a long period of time.

    FAQs

    What are startup KPIs?

    To drive growth that is meaningful and relevant to the target market, startup KPIs are used to identify, evaluate and develop a better strategy that helps to improve operational efficiency. Such KPIs, as related to startups, are the qualitative and quantitative measures that allow them to grow and sustain themselves.

    What KPIs need to be tracked for a startup?

    The KPIs that need to be tracked for a startup are:

    • Addressable Market Size
    • Profit Margin
    • Calculating Monthly Burn
    • Measuring the Runway
    • Measuring Customer Acquisition Cost (CAC)
    • Measuring Customer Retention Rate (CRR)
    • Measuring Customer Lifetime Value (CLV)
    • Measuring CAC Recovery Time

    What is Customer Acquisition Cost?

    Manufacturing cost, marketing cost, and distribution cost, all add up to a final number called the Customer Acquisition Cost (CAC). This is a cost that startups must be aware of and maintain strict vigilance on it. CAC is directly proportional to the growth time of a business.